“Widening Disparities”: Maine Props Up ‘Two Americas’ With No Medicaid Expansion
The Affordable Care Act, as originally passed, holds tremendous promise to decrease health care costs and increase insurance coverage rates across rural states like Maine. But federal court opinions and repeated vetoes of Medicaid expansion are putting all that into jeopardy. Already, data is pointing to widening disparities between the states embracing health reform and those that have resisted — in the numbers of uninsured, in new health care jobs and in the finances of local hospitals.
Historically, the United States has maintained the highest health spending in the world, but it still had lower life expectancies and the highest rates of infant mortality in the developed world. Health costs have sucked up 18 percent of our gross domestic product, leaching out wage gains and damaging America’s global competitiveness.
These factors drove Congress and the president to enact health care reform. Since then, despite the fact that health care utilization typically increases as the economy recovers from recession, health care cost growth has been held in check and health economists increasingly agree that this is due to the structural reforms initiated by the ACA.
And, with federal subsidies and Medicaid expansion to help cover the working poor, the number of people who are uninsured in the country is going down. These are promising trends, but die-hard reform opponents continue to work to reverse them. Every recalcitrant governor, every contentious court decision impedes health reform from realizing its full potential, despite its proven success to date.
There are two Americas. One is prosperous, long-lived and healthy. The second comprises the working poor who are short-lived, disabled early and beset by chronic illnesses that could have been prevented — diabetes, heart failure, pulmonary disease. Those in this second America are people who have a job — maybe two — but do not earn enough to make ends meet.
We make special provisions for some of the most vulnerable in this group — children, the elderly and disabled — but millions of hard-working Americans fall through the gaps. And unfortunately, the ranks of America’s working poor are increasing, not shrinking.
An American born in one of our rural counties is likely to live a shorter life than a person in Algeria or Bangladesh. Meanwhile, Americans who live in prosperous urban regions have life expectancies that rival the healthiest places in the world. This disparity exists, and it takes money. It costs our economy, through lost worker productivity and the high price of treating people in emergency rooms when they cannot afford less expensive preventive care.
As designed, health reform aimed to erase health disparities. It pumped money into making affordable health care available to Americans in poorer, more rural states like Maine. It offered good jobs and billions in economic impact while improving the quality of care to all Americans wherever they live, whatever their income. It directed money to cost-effective primary care and dedicated scholarship funds to increase the number of doctors in rural and underserved areas, like much of Maine.
The New York Times recently reported that state-level refusal to expand Medicaid combined with the recent court ruling jeopardizing subsidies to residents of states on the federal exchange threaten to undo the national reform and create a state-by-state patchwork. This would effectively maintain the two Americas. The states that declined to expand Medicaid or design state exchanges are mostly the poorer, less healthy states. Right now, Maine is on this list.
Gov. Paul LePage has vetoed majority votes to expand Medicaid five times. If we continue in this direction, 12 percent of Mainers will continue to be uninsured while 96 percent of residents in nearby Massachusetts are insured.
Politics threaten to block health reform from fulfilling its promise: to bridge the yawning gap in health and economic potential between the two Americas. Partisan politics shouldn’t block Maine from reaping the benefits of health reform — both in better health outcomes and in expanded economic opportunity.
By: Christy Daggett, Policy Analyst, The Maine Center for Economic Policy; Published in The Bangor Daily News, August 19, 2014
“Suburbanization Of Poverty”: Tensions In Ferguson Have Been Simmering Below Surface For Decades
The police shooting of Michael Brown was the spark.
But the tinder fueling the anger and resentment that has exploded in Ferguson, Mo., has been building for decades.
The town has seen many middle-class homeowners who eagerly moved to St. Louis’ northern suburbs after World War II to buy brick ranch homes with nice yards leave, replaced by poorer newcomers. Good blue-collar jobs have grown scarce; the factories that once sprouted here have closed shop. Schools have struggled.
And local governments — slow to evolve – often now look little like the people they represent. For the black community, it creates a sense of lost opportunity in a place much like other aging suburbs in the Rust Belt and across the country.
“For a young black man, there’s not much employment, not a lot of opportunity,” said Todd Swanstrom, a professor of public policy at the University of Missouri, St. Louis. “It’s kind of a tinder box.”
The seething tensions prompted Missouri Gov. Jay Nixon to declare a curfew in Ferguson on Saturday, one week after a white police officer shot and killed Brown, an 18-year-old black man. The declaration followed another night of looting.
Critics say an initial heavy-handed response by police using tear gas and rubber bullets touched off the unrest, with mainly white officers facing off against mainly black crowds.
Since Brown’s death, race and police tactics have dominated the headlines blaring from this town 12 miles northwest of St. Louis’ Gateway Arch. But that’s only part of the story.
From jobs to schools to racial transition, Ferguson and its neighboring towns — where many protesters came from — have undergone sweeping changes in recent years. Some places have become pockets of poverty, comparable to the poorest spots in St. Louis.
Others, like Ferguson, remain more mixed, with middle-class subdivisions alongside run-down streets and big apartment complexes like the one where Brown lived. Either way, Swanstrom said, the area highlights the growing challenge of the “suburbanization” of poverty.
“This was a catalyst for something much deeper, the lack of economic opportunities and representation people have,” said Etefia Umana, an educator and board member of a community group called Better Family Life. “A lot of the issues are boiling up.”
It’s been boiling for decades.
St. Louis’ jumble of suburbs — there are 91 municipalities in a county of about 1 million people ringing the city — has long been sharply segregated. Until the late 1940s, restrictive covenants blocked blacks from buying homes in many of them.
Well into the 1970s, tight zoning restrictions and other rules, especially in places near the city’s mostly black north side, kept many largely white, said Colin Gordon, a University of Iowa professor who’s studied housing in St. Louis.
That began to change by the 1980s, when middle- and working-class white families began leaving north county — as the area around Ferguson is known — for newer, roomier housing further out in the exurbs. In their place came a flood of black families from St. Louis in search of better housing and schools.
“When black flight out of the city began, this was the logical frontier,” Gordon said. “It became what the city had been, a zone of racial transition.”
In Ferguson, the change happened fast. In a generation — from 1990 to today — the population changed from three-fourths white to two-thirds black. Even as the area’s demographics shifted, good blue-collar jobs sustained many of these towns, said Lara Granich, a community organizer.
“Everyone in our parish was a brick layer or a letter carrier or something. I didn’t know anyone who had gone to college, but they all made a decent living,” said Granich, who grew up in nearby Glasgow Village, another neighborhood on the decline. “The people who live there now tend to work at McDonald’s.”
The recession hurt, too. This part of the St. Louis region took the brunt of the foreclosure crisis, with subprime loans turning bad, and investors scooping up cheap houses to rent. Auto plants that had sustained a black middle-class shut down.
Since 2000, the median household income in Ferguson has fallen by 30 percent when adjusted for inflation, to about $36,000. In the Census tract where Brown lived, median income is less than $27,000. Just half of the adults work.
Fr. Steven Lawler, rector of St. Stephen’s Episcopal Church in Ferguson, really saw the change in 2008, when visits to his food pantry spiked. They haven’t gone down since.
“I know there are places where an economic recovery’s happening,” he said. “But in the places where people are most stressed, there hasn’t been a recovery.”
Still, as Lawler and others note, Ferguson has some things going for it. Its pleasant, old downtown has seen a revival in recent years, with a busy Saturday farmers market and a new craft brewery. It still has middle-class neighborhoods of historic homes. The headquarters of a Fortune 500 company — Emerson Electric Co. — sits on a serene campus just up the hill from the gas station looters burned a week ago Sunday night.
Gail Babcock, program director at Ferguson Youth Initiative, was quick to note her town still has a strong sense of community — and every morning last week volunteers have poured in to clean up from protests and looting. The challenge is in connecting its poorer residents – especially younger ones – to it.
“It’s very hard for them to find jobs,” said Babcock, who runs a community service program for youth convicted of minor criminal offenses. “That sets up a situation where they tend to get in trouble, and they probably wouldn’t under other circumstances.”
Then there are the schools, one reason why many families moved to these suburbs in the first place. Two north county districts – including the one where Brown graduated from high school in May — have lost their state accreditation in recent years. The district Ferguson shares with a neighboring town remain accredited but scores low on state tests.
That was a big reason why John Weaver took the morning off work Friday, drove his plumbing truck to Florissant, and asked the visiting Gov. Nixon what he planned to do about the problems that have plagued these neighborhoods for years.
Nixon acknowledged there’s “a lot of work to do.” Weaver was not impressed.
“All these politicians say they’ll fight for our education. I feel cheated,” he said in an interview later. “And if I feel cheated, how should these kids feel?”
These issues are all tied together for Shermale Humphrey, a 21-year-old who joined the protests last week. She plans to enlist in the Air Force, but right now works at a McDonald’s near where Brown was shot. She’s something of a veteran activist – helping to organize strikes by fast-food workers in St. Louis — and sees race and local politics and economics here as closely intertwined.
“It’s a shortage of everything,” she said. “It’s a shortage of jobs. Of African Americans on the police force and in government. Of people not being able to get a good education.”
Adding to the frustration, many protesters say, is that the people still running many of these downs don’t much look like the people who live there now. Just three of Ferguson’s 53 police officers are black. Six of seven City Council members are white. So are six of the seven school board members, who run a district with a student body that’s 78 percent black.
Many of these towns are still run “like little fiefdoms,” said Umana, who moved to Ferguson eight years ago, by remnants of their old white middle class that may not share the concerns of newcomers.
“The numbers flip-flopped, but the power structure remained the same,” he said.
It has been hard to build black political leadership in these fast-changing suburbs, said Mike Jones, a black veteran of St. Louis’ political scene. Indeed, it’s been harder than in St. Louis, which has long been racially mixed.
But a more diverse set of voices at Ferguson City Hall, Jones said, might have avoided the heavy-handed police response that only inflamed protests.
“The question is how — in a city that’s 67 percent African-American — do you have absolutely no African American political representation?” Jones asked. “That’s what leads you to a police force that could become involved in this sort of incident.”
It’s an issue more communities will have to face, Jones predicts, as traditionally “urban” issues of poverty and racial change migrate to suburbs often less-equipped to deal with them. And not just in St. Louis.
A study last month by the Brookings Institution found the number of poor people living in high-poverty suburban neighborhoods nationwide more than doubled in the last decade, growing much faster than in big cities.
Chris Krehmeyer, who runs St. Louis-based community development nonprofit Beyond Housing, says he knows colleagues around the country dealing with a lot of the same issues as he is in north St. Louis County, tackling housing and jobs and schools all at once. The key, he said, is to build trust with residents before the community blows up.
Ferguson is a bellwether, he said. “This story could happen in lots of different places, all over this country.”
By: Tim Logan and Molly Hennessy-Fiske, The Los Angeles Times; The National Memo, August 18, 2014
“The Forever Slump”: The Debate Between The ‘Too-Muchers’ And The ‘Not-Enoughers’
It’s hard to believe, but almost six years have passed since the fall of Lehman Brothers ushered in the worst economic crisis since the 1930s. Many people, myself included, would like to move on to other subjects. But we can’t, because the crisis is by no means over. Recovery is far from complete, and the wrong policies could still turn economic weakness into a more or less permanent depression.
In fact, that’s what seems to be happening in Europe as we speak. And the rest of us should learn from Europe’s experience.
Before I get to the latest bad news, let’s talk about the great policy argument that has raged for more than five years. It’s easy to get bogged down in the details, but basically it has been a debate between the too-muchers and the not-enoughers.
The too-muchers have warned incessantly that the things governments and central banks are doing to limit the depth of the slump are setting the stage for something even worse. Deficit spending, they suggested, could provoke a Greek-style crisis any day now — within two years, declared Alan Simpson and Erskine Bowles some three and a half years ago. Asset purchases by the Federal Reserve would “risk currency debasement and inflation,” declared a who’s who of Republican economists, investors, and pundits in a 2010 open letter to Ben Bernanke.
The not-enoughers — a group that includes yours truly — have argued all along that the clear and present danger is Japanification rather than Hellenization. That is, they have warned that inadequate fiscal stimulus and a premature turn to austerity could lead to a lost decade or more of economic depression, that the Fed should be doing even more to boost the economy, that deflation, not inflation, was the great risk facing the Western world.
To say the obvious, none of the predictions and warnings of the too-muchers have come to pass. America never experienced a Greek-type crisis of soaring borrowing costs. In fact, even within Europe the debt crisis largely faded away once the European Central Bank began doing its job as lender of last resort. Meanwhile, inflation has stayed low.
However, while the not-enoughers were right to dismiss warnings about interest rates and inflation, our concerns about actual deflation haven’t yet come to pass. This has provoked a fair bit of rethinking about the inflation process (if there has been any rethinking on the other side of this argument, I haven’t seen it), but not-enoughers continue to worry about the risks of a Japan-type quasi-permanent slump.
Which brings me to Europe’s woes.
On the whole, the too-muchers have had much more influence in Europe than in the United States, while the not-enoughers have had no influence at all. European officials eagerly embraced now-discredited doctrines that allegedly justified fiscal austerity even in depressed economies (although America has de facto done a lot of austerity, too, thanks to the sequester and cuts at the state and local level). And the European Central Bank, or E.C.B., not only failed to match the Fed’s asset purchases, it actually raised interest rates back in 2011 to head off the imaginary risk of inflation.
The E.C.B. reversed course when Europe slid back into recession, and, as I’ve already mentioned, under Mario Draghi’s leadership, it did a lot to alleviate the European debt crisis. But this wasn’t enough. The European economy did start growing again last year, but not enough to make more than a small dent in the unemployment rate.
And now growth has stalled, while inflation has fallen far below the E.C.B.’s target of 2 percent, and prices are actually falling in debtor nations. It’s really a dismal picture. Mr. Draghi & Co. need to do whatever they can to try to turn things around, but given the political and institutional constraints they face, Europe will arguably be lucky if all it experiences is one lost decade.
The good news is that things don’t look that dire in America, where job creation seems finally to have picked up and the threat of deflation has receded, at least for now. But all it would take is a few bad shocks and/or policy missteps to send us down the same path.
The good news is that Janet Yellen, the Fed chairwoman, understands the danger; she has made it clear that she would rather take the chance of a temporary rise in the inflation rate than risk hitting the brakes too soon, the way the E.C.B. did in 2011. The bad news is that she and her colleagues are under a lot of pressure to do the wrong thing from the too-muchers, who seem to have learned nothing from being wrong year after year, and are still agitating for higher rates.
There’s an old joke about the man who decides to cheer up, because things could be worse — and sure enough, things get worse. That’s more or less what happened to Europe, and we shouldn’t let it happen here.
By: Paul Krugman, Op-Ed Columnist, The New York Times, August 14, 2014
“The Entitlement Of The Very Rich”: Gutting Social Security And Medicare Far More Unthinkable Than Not Reauthorizing Ex-Im Bank
The very rich don’t think very highly of the rest of us. This fact is driven home to us through fluke events, like the taping of Mitt Romney’s famous 47 percent comment, in which he trashed the people who rely on Social Security, Medicare, and other forms of government benefits.
Last week we got another opportunity to see the thinking of the very rich when Jeffrey Immelt, the CEO of General Electric, complained at a summit with African heads of state and business leaders that there is even an argument over the reauthorization of Export-Import Bank. According to the Washington Post, Immelt said in reference to the Ex-Im Bank reauthorization, “the fact that we have to sit here and argue for it I think is just wrong.”
To get some orientation, the Ex-IM Bank makes around $35 billion a year in loans or loan guarantees each year. The overwhelming majority of these loans go to huge multi-nationals like Boeing or Mr. Immelt’s company, General Electric. The loans and guarantees are a subsidy that facilitates exports by allowing these companies and/or their customers to borrow at below market interest rates.
As a practical matter, whether the bank is reauthorized or not will have no noticeable impact on the economy. If the government took away the subsidy on this $35 billion in exports, it would probably lead to a decline of between 10 and 30 percent in these exports ($3.5 billion to $10.5 billion), while costing Boeing, GE, and the rest some of their profit margin on the portion they continued to export.
The loss of exports would be in the range of 0.2 percent to 0.5 percent of total exports or 0.02 percent to 0.06 percent of GDP. (This assumes that none of the exports include imported parts, which is obviously not the case.) In short the impact on the economy of ending the subsidies from the Ex-Im Bank would be almost invisible.
If the folks pushing for the Ex-Im Bank reauthorization were really concerned about jobs created through trade, we could generate far more jobs with even a modest decline (e.g. 1 percent) of the dollar against other currencies. This would make our exports cheaper to people in other countries and would reduce the price of domestically produced goods relative to imports, thereby leading consumers to purchase more U.S. made goods.
While ending the Ex-Im Bank would have little impact on trade and jobs it would be a big deal to Mr. Immelt’s company and presumably to Mr. Immelt’s compensation. Therefore it is not surprising that he might find it “just wrong” that we should even have to argue about it.
For some additional context, it is worth noting that Mr. Immelt is one of the members of the Peter Peterson initiated group, Fix the Debt. In that capacity he has gone around the country arguing for the need to cut Social Security and Medicare benefits. So we have someone who makes $25 million a year, at least in part from taxpayer handouts, who runs around the country complaining about retired workers getting $1,300 a month from Social Security, whining because he has to argue to continue the handouts he receives.
It would be nice if Immelt were just another crazed one percenter who had no credibility outside of his country club, however this is not the case. It was not an accident that Mr. Immelt was at this summit. He is a highly respected business leader and apparently is close enough to president Obama to have been made head of his Council on Jobs and Competitiveness.
The reality is that the Immelts of the world are able to put muscle behind their sense of entitlement because politicians need their campaign contributions to be credible candidates. For this reason, they are almost certain to secure the reauthorization of the Ex-Im Bank, which has the support of most of the leadership of both parties.
The rest of us just have our votes. But if the public has a clear understanding of the agenda of the Immelts of the world, and their political allies, it will be better positioned to protect the entitlements that workers depend on and have paid for. Gutting Social Security and Medicare should be far more unthinkable than not reauthorizing the Ex-Im Bank.
By: Dean Baker, Co-Director, CEPR; The Hufington Posst Blog, August 12, 2014
“24 Health-Care Scandals”: Legislators Who Block Medicaid Expansion Are Stiffing Veterans Out Of Health Care, And Stiffing Workers Out Of Jobs
The scandal over long wait times for veterans in the Department of Veterans Affairs health system has grabbed a lot of headlines and elicited a lot of righteous anger — as it should. America’s veterans deserve so much better.
But as Ezra Klein pointed out in a piece in Vox, there’s another health care scandal that also deserves its share of righteous anger, and it also has a big impact on veterans with health care needs: the self-destructive refusal of lawmakers in 20-plus states to accept federal funds to expand their Medicaid programs.
Klein cataloged “24 health-care scandals that critics of the VA should also be furious about” (that is, the 24 states that have rejected the Medicaid expansion). Thanks to lawmakers’ knee-jerk opposition to expanding health coverage in those states, there are huge numbers of uninsured veterans who should be eligible for coverage, but aren’t: 41,200 veterans in Florida, 24,900 in Georgia, 48,900 in Texas… and the list goes on.
All in all, about 250,000 uninsured veterans are getting stiffed out of eligibility for health coverage by lawmakers who have blocked Medicaid expansion, according to Pew’s Stateline. As it turns out, those lawmakers are also stiffing their own states out of economy-boosting jobs — health care jobs that are overwhelmingly good-paying jobs. Medicaid expansion would create thousands more of these jobs.
Virginia, where Medicaid expansion still hangs in limbo, is a perfect example. According to a report from Chmura Economics & Analytics, Medicaid expansion would create an average of over 30,000 jobs annually in Virginia, including more than 15,000 jobs in the state’s health care sector. An analysis of data on projected job openings and wage levels underscores that these will be good-paying, economy-boosting jobs.
For a single adult in Virginia, less than half of all projected job openings statewide pay above a living wage ($18.59/hour, according to the 2013 Virginia Job Gap Study). However, three out of five health care job openings and close to nine out of 10 health practitioner and technical job openings do.
For a household with two working adults and two children, while less than two out of five projected job openings in Virginia pay median wages above a living wage ($21.99/hour per worker), half of health care job openings and more than seven out of 10 health practitioner and technical job openings do.
Or look at Maine, where Gov. Paul LePage vetoed a bipartisan Medicaid expansion plan passed by the Maine Legislature earlier this year, and too few Republican legislators were willing to break ranks with the Governor to override his veto. There, Medicaid expansion would create over 4,000 jobs by 2016, including more than 2,000 jobs in Maine’s health care sector. As with Virginia, health care jobs beat statewide wage levels in Maine by wide margins.
For a single adult, less than half of all projected job openings in Maine pay above a living wage ($15.18/hour, according to the 2013 Maine Job Gap Study). But two-thirds of health care job openings and almost nine out of 10 health practitioner and technical job openings do. For a household with two working adults and two children, while barely one-third of projected job openings in Maine pay above a living wage ($18.87/hour per worker), almost three-fifths of health care job openings and more than four out of five health practitioner and technical job openings do.
Health care jobs are also overwhelmingly higher-wage jobs in states like Montana and Idaho. But all these states, along with 20 others, have been missing out on these economy-boosting jobs because their legislatures or governors have rejected Medicaid expansion.
State lawmakers who continue to block Medicaid expansion do so at their own peril — both morally and electorally. Because you can only stiff your own constituents — including low-income, uninsured veterans — out of both access to health care and good-paying, economy-boosting jobs for so long before it catches up with you.
Want to really do something to help veterans get access to the health care they need and create good-paying jobs for your constituents at the same time? Two words: expand Medicaid.
By: LeeAnn Hall, Executive Director, The Alliance For A Just Society; The Huffington Post Blog, August 6, 2014
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